24.71 0.00 (0.00%)
After hours: 5:26PM EDT
|Bid||23.98 x 800|
|Ask||25.01 x 900|
|Day's Range||24.70 - 25.03|
|52 Week Range||18.30 - 28.73|
|Beta (3Y Monthly)||1.69|
|PE Ratio (TTM)||9.10|
|Forward Dividend & Yield||0.50 (2.04%)|
|1y Target Est||N/A|
The grandchildren of the founder of German publisher Axel Springer have tendered some of their shares to KKR, the U.S. private equity investor that has offered to buy out minority shareholders. Ariane Springer and Axel Sven Springer sold approximately 3.7% of the share capital in the business but will retain the rest of their holdings as independent shareholders, KKR said in a statement on Friday. KKR had already secured a 27.8% stake in Axel Springer via its offer of 63 euros per share, which has been extended on the same terms until Aug. 21.
(Bloomberg) -- KKR & Co. is considering selling LGC Group, the British scientific measurement and testing company, people familiar with the matter said.The buyout firm is speaking to advisers as it reviews its holding in the business, which could fetch more than 1 billion pounds ($1.2 billion) in a sale, the people said, asking not to be identified because the deliberations are private. The deliberations are at an early stage, and KKR may decide to retain the company for longer, they said.A spokesman for KKR declined to comment.KKR bought LGC from Bridgepoint in 2016 after announcing the deal in December 2015 without disclosing terms. Since then, LGC has made a number of acquisitions including Axolabs in 2017, which added to the company’s analytical drug-development services, specialty reagents maker Berry & Associates in 2018 and a majority stake in Toronto Research Chemicals this month.The more-than 175-year-old company’s revenue rose 18% to 331.2 million pounds in the fiscal year ending in March 2018, according to its annual report. Adjusted earnings before interest, taxes, depreciation and amortization rose 19% to 86.4 million pounds, the report showed.LGC traces its origins to 1842 to a body created in London to regulate tobacco adulteration. It still provides independent chemical and bioanalytical measurements to resolve disputes relating to food and agriculture and advises the U.K. government. Previously known as Laboratory of the Government Chemist, the firm was privatized in 1996.To contact the reporters on this story: Sarah Syed in London at firstname.lastname@example.org;Dinesh Nair in London at email@example.comTo contact the editors responsible for this story: Dinesh Nair at firstname.lastname@example.org, Amy Thomson, Fion LiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
German publisher Axel Springer said it was actively looking at potential takeovers, even as a buyout of its minority shareholders awaits completion, amid speculation that the digital classifieds sector will consolidate in Europe. CEO Mathias Doepfner's comments on Wednesday came after Scout24 said it would explore a sale or spin-off of its autos platform, bowing to U.S. activist investor Elliott's call to break up the business. Doepfner, speaking after Springer reported a decline in second quarter revenue and earnings, said he had "no concrete thoughts" on those particular assets but was holding constant market soundings and analysing acquisition opportunities.
(Bloomberg Opinion) -- When the market doesn’t go your way, there’s a certain deflective comfort to be found in blaming the market. The slump in energy stocks has spurred some talk of getting out of public markets altogether – even as one company, Saudi Aramco, is apparently considering finally taking a giant plunge into them. Conflicting signals, yes, but united in one important aspect. Harold Hamm, CEO of fracker Continental Resources Inc., was asked on the latest earnings call what value there was in the company remaining public. The stock has fallen by more than half since last October to about $30, while the consensus target is about $51, according to figures compiled by Bloomberg. Hamm responded he didn’t see a lot of value in it “in today’s market,” and the analyst commiserated on the herd’s apparent short-sightedness, saying “there’s clearly something broken there.”Over in the power sector, Vistra Energy Corp.’s CEO, Curtis Morgan, fielded a similar question for similar reasons. While professing “faith” in public markets, he added that going private must be considered if the stock’s perceived discount doesn’t ultimately close.There are specific reasons why this question was asked of these two companies. Hamm owns almost 77% of Continental anyway, so the free float is currently valued at just $2.8 billion. Vistra, meanwhile, has private equity deep in its DNA, being one piece resulting from the 2007 buyout of TXU Corp. and run by an alumnus of Energy Capital Partners LLC.Public markets aren’t paragons of rationality, with the wisdom of the crowd repeatedly giving way to the mania of the mob. But it’s tough to argue the market is “broken” here. After all, if it’s irrational now, then wasn’t that also the case five years ago, when Continental traded at about $80 just as oil prices began to slip? Recall the company sold its hedging book around that time, ditching its insurance against an oil crash, with Hamm in November 2014 telling, coincidentally, the same analyst:… We feel like we're at the bottom rung here on the [oil] prices and we'll see them recover pretty drastically, pretty quick.Clearly, there isn’t a public-market monopoly on getting stuff wrong.The private market has its own checkered record in energy. There have been obvious blowups, such as KKR & Co. Inc.’s forays with Samson Resources Corp. and, of course, TXU. Vistra’s sector, merchant generation, has a long history of keeping bankruptcy judges busy, which is precisely why it’s one of only two public companies left – and why both are diversifying into more stable retail operations.Continental and Vistra have sold off for similar and quite rational reasons. Oil and gas prices are in the tank, and forecasts for Continental’s earnings take their cue from that. Similarly, as expectations of a hot and profitable summer in the Texas power market have cooled off, so Vistra’s stock has dropped with power futures.This cuts both ways, and investors with a bullish view on energy prices are free to swoop in. They haven’t. That may reflect such ordinary things as fear of a recession, but I think it has more to do with a deterioration in one longstanding reason to own energy stocks: gaining exposure to the underlying commodity.Chalk it up to a mixture of hindsight and foresight. Investors have noticed, especially with E&P companies, that past windfalls generated by price rallies tended to accrue to drilling budgets and executive compensation instead of them. Looking ahead, fundamental shifts in the energy market – from shale to renewables to peak demand forecasts to trade wars – inject volatility and raise doubts about long-term pricing. Rather than put a big multiple on future earnings tied to commodity prices and growth, investors prioritize near-term free cash flow that can underpin dividends – show me the money, in other words.You can see this in E&P valuation multiples. Traditionally, these swung low when oil prices were very high, in anticipation of an inevitable cyclical downswing, and rose when prices fell, pricing in the next recovery. In this latest cycle, however, that relationship has changed. When oil prices fell sharply in 2015 and 2016, valuation multiples soared (and equity issuance spiked). But when oil dropped in late 2018 and this summer, multiples fell alongside it.Similarly, while Bloomberg NEF reports Texas’ wholesale electricity market is the tightest it’s been since the lucrative summer of 2011, investors aren’t paying up for the option in Vistra’s stock. That may be a trust thing, in part, as the timetable for deleveraging set by Vistra when it bought Dynegy Inc. has slipped. But it also reflects the quite reasonable concern that new renewable capacity, especially solar power, could loosen Texas’ electricity market quite quickly – as has happened in the past.The higher risks around energy earnings and damaged trust means investors demand more to buy into them – meaning a higher cost of capital expressed in lower valuations.Herein lies a lesson for Saudi Arabian Oil Co., to give it its full name. The seemingly endless saga of Aramco’s IPO has been dogged by the $2 trillion market-cap target voiced by Prince Mohammed Bin Salman in 2016. As I wrote here, that number reflected a simplistic valuation of Aramco’s vast reserves, even though today’s oil investors prioritize dividends partly because they suspect barrels not due to be produced for another few decades may never see the light of day. Just like earnings streams for Continental and Vistra, the benefit of the doubt, expressed as a high multiple, has diminished.Talk of an Aramco IPO was revived, somewhat jarringly, in the same week Saudi officials were trying to talk up sagging oil prices. Maybe the IPO talk remains just that, but it could also mean Saudi Arabia may actually go ahead, even if that finally buries the $2 trillion fantasy. Facing chronic deficits, Riyadh could use the money; and, as cynics often contend, the public market is where the dumb – that is, cheap – money is to be found. The one catch is that, when it comes to energy, the dumb money looks a little wiser these days.To contact the author of this story: Liam Denning at email@example.comTo contact the editor responsible for this story: Mark Gongloff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Barely a year after serving as student body president at the NYU Stern School of Business, a junior analyst at RBC Capital Markets was charged by federal prosecutors with insider trading.Bill Tsai, 23, is accused of trading ahead of the April 15 announcement that private equity firm Siris Capital Group would acquire the digital printing technology company Electronics for Imaging, or EFI. The Securities and Exchange Commission also filed a related civil lawsuit in Manhattan on Monday.“Tsai learned of the impending acquisition through his work” at the firm, which the government identifies as Investment Bank A. Soon afterward, Tsai stole the “material nonpublic information” by buying options in EFI in a personal account he had concealed from the bank, earning $98,750, the U.S. said.Sanam Heidary, a spokeswoman for RBC Capital Markets, the investment-banking division of Royal Bank of Canada, said the New York firm had suspended Tsai. Tsai’s LinkedIn page identifies him as an investment banking analyst and says he joined the firm in July 2018.“RBC has a zero-tolerance approach to any breach of the law or our code of conduct,” Heidary said. “We have cooperated fully with law enforcement as it relates to this matter.”All-Cash DealEFI agreed to be purchased by Siris Capital in an all-cash deal valued at about $1.7 billion, representing about a 26% premium to the April 12 closing price. Siris secured committed debt financing from RBC Capital, KKR Capital, Deutsche Bank, Barclays, Credit Suisse and Macquarie Capital.Tsai, who lives in New York, used a secret trading account to buy 187 out-of-the-money call options for $28,410 in late March and early April, according to prosecutors. When the EFI deal was announced, shares shot up 29%, they said.Tsai was arrested Sunday morning and is charged with a single count of securities fraud. In court on Monday, he was released on a $100,000 bond. He faces a prison sentence if convicted. His attorney, Mark Hellerer, declined to comment. “His profits were not the result of trading acumen, diligent research, or blind luck, but rather, as alleged, the product of theft of confidential information from his employer,” U.S. Attorney Geoffrey Berman in Manhattan said in a statement.Summer InternTsai joined RBC as an intern in summer 2017, according to the government. He was hired full time beginning in July 2018, after his graduation from Stern’s undergraduate business program. One of his duties was updating and circulating a confidential internal report that tracked client deals, including mergers and acquisitions. He learned of the impending EFI deal from his work on the report, according to the criminal complaint.Tsai came to New York from his native Taiwan to attend Stern, one of the top programs in the U.S., where he concentrated in finance. He was the student body president of the undergraduate business school in 2018, according to his LinkedIn page.In a November 2017 interview with the Stern School website, Tsai was asked what advice he would give to first-year students.“Hold on to your values,” he answered, according to the website. “I think the biggest thing is that you learn so many things in school. That’s a beautiful part of the school, but it’s to figure out what you believe in.”The criminal case is U.S. v Tsai, 19-cr-7464, U.S. District Court, Southern District of New York (Manhattan). The SEC case is SEC v. Tsai, 19-cv-7501, U.S. District Court, Southern District of New York (Manhattan).(Updates with arrest, bail details.)To contact the reporters on this story: Bob Van Voris in federal court in Manhattan at email@example.com;Doug Alexander in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: David Glovin at email@example.com, David S. JoachimFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
By John Jannarone Evercore Inc. has hired veteran investment banker Neil Shah as a Senior Managing Director to launch and lead its permanent capital business, which will include a push into special purpose acquisition companies, or SPACs. Mr. Shah, who will be part of Evercore’s advisory practice, has worked closely with financial sponsors for over […]
(Bloomberg) -- KKR & Co. said it will pay NVC Lighting Holding Ltd. $794 million for a majority stake in its China lighting business.The companies said in a statement they will set up a strategic partnership for the business. Once completed, KKR will own 70% of NVC China and NVC Lighting will hold the remaining 30%.NVC Lighting said it will pay a special dividend of at least 9 Hong Kong cents ($0.01) a share after the deal closes, which is expected in the fourth quarter.KKR said the investment is from its flagship Asian Fund III and that it’s invested more than $4.5 billion in China since 2007.Paul, Weiss, Rifkind, Wharton & Garrison LLP, Fangda Partners and Kirkland & Ellis acted as legal advisers to KKR. Freshfields Bruckhaus Deringer acted as legal adviser and Deloitte & Touche acted as financial adviser to NVC Lighting.To contact the reporter on this story: Sara Marley in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Andrew Davis at email@example.com, John Deane, Tony HalpinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Despite warnings coming from the Treasury market, the U.S. economy will avoid a recession and negative-yielding government bonds, KKR & Co.’s Henry McVey said.The head of global macro and asset allocation at the private-equity firm said the Federal Reserve will continue to cut interest rates, keeping the economy from contracting even as growth slows. Rising tensions in the U.S.-China trade war and slowing global growth spurred a rally in bonds this week, with Treasury 30-year yields closing in on their lowest level ever.“Do I find it alarming? Yes,” McVey said in an interview on Bloomberg TV. “But nominal U.S. rates won’t go below zero. “You would have to believe that we’re having a very strong decline in nominal GDP or recession.”McVey’s view is in contrast to a growing chorus of analysts now warning that U.S. Treasury yields could eventually go negative, with Pacific Investment Management Co.’s Joachim Fels saying it’s no longer “absurd” to imagine the scenario.The U.S. should be able to keep growth positive, McVey said, but he warned that there currently is a “global manufacturing recession,” partly because of a trade war that has curtailed capital spending.McVey expects tensions to cool for now, with China unlikely to undertake a large-scale devaluation of its currency even after it weakened to an 11-year low earlier in the week. McVey said the drop sent a “shot across the bow,” representing a signal that the country has the tools to match what the Trump administration is doing on the trade front.U.S. stocks rose on Thursday after China’s stronger-than-expected daily fixing of its currency soothed fears about a worsening trade conflict. The yuan’s level became a closely-watched event after a weak reference rate on Monday triggered concern about a global currency war.To contact the reporters on this story: Erik Schatzker in New York at firstname.lastname@example.org;Vildana Hajric in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- KKR & Co. exceeded the $1 billion fundraising goal for its first Global Impact Fund, according to a person with knowledge of the matter.The fund, aimed at addressing social and environmental problems with private capital, hasn’t closed and is still raising money from investors, said the person, who asked not to be identified because the information isn’t public.Co-led by KKR executives Ken Mehlman and Robert Antablin, the fund has been gathering commitments since early 2018. The billion-dollar mark makes it one of the largest impact pools, as private equity firms look to play a bigger role in the fast-growing socially responsible investing area.TPG’s $2 billion Rise Fund is the largest impact investing pool, though the firm is targeting at least $3 billion for the second version. Bain Capital raised $390 million in 2017 for its fund focusing on mission-oriented companies, and Partners Group closed a $210 million impact fund this year. Blackstone Group Inc. and Carlyle Group LP recently hired executives to build out their impact strategies, as pension funds and the wealthy increasingly embrace the trend.KKR’s Global Impact Fund has already made two investments, acquiring stakes in Indian recycling firm Ramky Enviro Engineers Ltd. and Singapore-based energy-efficiency company Barghest Building Performance.To contact the reporter on this story: Emily Chasan in New York at email@example.comTo contact the editors responsible for this story: Janet Paskin at firstname.lastname@example.org, Josh Friedman, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Elwy 3 Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Elliott Management Corp. demanded German classifieds group Scout24 AG split itself in two and pursue a bigger share buyback to boost investor returns after a sale of the company fell through in May.The U.S. activist investor, which disclosed a 7% stake in Scout24 on Monday alongside a letter laying out its position, said the company should sell its car listing business and focus on its real-estate unit, a move that Elliott predicted could lift the stock close to 65 euros a share. That’s well beyond the company’s previous record and more than twice its initial-public offering of 30 euros in 2015.“We believe there is a growing demand among a wide array of stakeholders for Scout24’s leadership to demonstrate a level of urgency that has thus far been lacking,” Elliott said.Scout24 has been vulnerable to an activist since its shareholders rejected a 46-euro-per-share offer from private equity firms Blackstone Group LP and Hellman & Friedman in May. Last month, the company announced it would simplify its structure to better focus on its two biggest businesses -- auto and real estate -- as well as pursue a 300 million-euro ($334 million) share buyback. For Elliott, the moves aren’t enough.The stock is now trading near its record high, closing Friday at 50.25 euros, and is up about 25% this year. The shares rose 0.7% as of 12:08 p.m. in Frankfurt, while the broader Stoxx Europe 600 Index was down 1.6%.Elliott said it has outlined its views for a breakup of Scout24 in meetings with managers of the company, whom it said should never have recommended the Blackstone-Hellman & Friedman offer.The AutoScout24 car business and the Immobilienscout24 real estate unit “do not have any material synergies sitting under one roof,” Elliott said, arguing that the existing structure doesn’t allow for resources to be allocated efficiently across divisions and employees don’t have proper incentives.In a statement, Scout24 said it has had active discussions with shareholders including Elliott in the past few months, before and after announcing its new strategy and committed to continue the dialogue. “We have announced comprehensive steps to strengthen both core businesses, continue to grow revenue while increasing operational efficiency and capital structure optimization,” Scout24 said. AutoScout24 SuitorsThere is rumored or confirmed interest from potential buyers in AutoScout24, and Immobilienscout24 is worth more than 5 billion euros ($5.6 billion) alone, almost as much as the entire company, Elliott said.A number of competitors could bid for AutoScout24, Germany’s second-biggest car listings business after EBay Inc.’s Mobile.de, with 1.1 million listings and 1.5 million listings, respectively.Softbank Group Corp.-backed Auto1 Group GmbH has expressed interest in buying the business in the past, according to people familiar with the matter, who asked not to be identified because the deliberations were private. And German publisher Axel Springer SE, which is being acquired by KKR & Co., has been seen as a potential suitor by analysts at Liberum, who valued AutoScout24 at 2.3 billion euros in a note last month.Spokeswomen for Auto1 and Axel Springer declined to comment.Elliott’s six-page letter to Scout24, dated July 26, outlines what the activist sees as the company’s potential, what it views as “missed opportunities” and its opinion on Scout24’s path forward. Addressed to Chief Executive Officer Tobias Hartmann and Supervisory Board Chairman Hans-Holger Albrecht, it’s replete with strong criticisms. Elliott said Scout24’s current share buyback plan was “grossly lacking in ambition.”The investor complained that Scout24’s executives had heard the fund’s ideas privately and promised to give feedback on its proposals, but instead issued a July 19 press release with its strategy update that “widely missed the mark,” according to Elliott.Elliott in GermanyScout24 adds to Elliott’s campaigns in Germany, where it has recently targeted pharmaceutical giant Bayer AG, software company SAP SE and industrial firm Thyssenkrupp AG.Elliott wants Bayer to settle legal claims linked to products from its Monsanto unit to unlock shareholder value. SAP has pursued a restructuring since Elliott disclosed a 1.2 billion-euro stake in April. At Thyssenkrupp, the chief executive officer and chairman resigned following criticism from investors including Elliott, who derided the company’s slow turnaround and what they see as its poor share price performance.(Updates with Scout24 statement in eight paragraph, context throughout.)\--With assistance from Frank Connelly.To contact the reporters on this story: Stefan Nicola in Berlin at email@example.com;Eyk Henning in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Rebecca Penty at email@example.com, Benedikt KammelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Shares of Campbell Soup Co. gained 0.6% in morning trade to buck the selloff in the broader market, after the consumer foods company announced a deal to sell Arnott's, and certain international operations, to KKR & Co. Inc. for $2.2 billion in cash. Arnott's, the Australia-based snack brand that Campbell bought in 1997, had sales of $885 million in the latest 12 months and employs about 3,800 people. Under terms of the deal, Campbell and KKR will enter into a licensing agreement for the exclusive rights to use certain Campbell brands, including Campbell's, Swanson, V8, Prego, Chunky and Campbell's Real Stock. The deal comes after Campbell said a year ago that it would divest Campbell International and Campbell Fresh to focus on its North American businesses and cut debt. Campbell's stock has gained 1.6% over the past year, while the SPDR Consumer Staples Select Sector ETF has climbed 10.3% and the S&P 500 has gained 3.5%.
Investment firm KKR & Co. said it was buying some of Campbell Soup's international assets in a deal worth $2.2 billion. The transaction involves KKR taking over the Australian snacks unit, Arnott's, and the top-selling cookie brand Tim Tam. The deal also includes a long-term licensing deal that will allow KKR exclusive rights to use some Campbell brands including Swanson and V8 in the Asia Pacific.
Campbell and KKR will enter into a long-term licensing arrangement for the exclusive rights to use certain Campbell brands, including Campbell's, Swanson, V8, Prego, Chunky and Campbell's Real Stock, in Australia, New Zealand, Malaysia and other select markets, the company said. "This was a thorough and complex process in which we considered many options," Campbell Chief Executive Officer Mark Clouse said.
Carlyle Group LP emulated its peers on Wednesday with plans to convert from a publicly traded partnership into a corporation, and went one step further by announcing it will become the first U.S. private equity firm to hold shareholder votes. Insiders own 66% of Carlyle, and the vast majority of them have committed to voting their shares as a block for up to five years, the firm said. The move could end up boosting Carlyle's valuation, because it will allow its inclusion in indices that exclude publicly traded partnerships.
(Bloomberg) -- V.G. Siddhartha, the founder of India’s biggest coffee chain, has been confirmed dead days after he purportedly wrote a letter indicating he was anxious about pressure from banks, investors and the tax authorities.Siddhartha told his driver he was going for a walk on Monday, near a bridge close to the southern Indian city of Mangaluru. He was reported missing after he failed to return to the car later that night. The city’s police commissioner Sandeep Patil said early Wednesday that Siddhartha’s body had been found, but didn’t elaborate on the circumstances of his death.Coffee Day Enterprises Ltd., the company Siddhartha founded, released a letter on Tuesday purportedly written by him to the board. It talks of “succumbing to the situation” because of pressure from lenders and one of the company’s private equity partners, as well as harassment by tax officials. The letter, printed on a white sheet of paper bearing Siddhartha’s name boldly on top and Coffee Day’s address at the bottom, is addressed to the company’s board and employees.“I gave it my all but today I gave up as I could not take any more pressure from one of the private equity partners forcing me to buy back shares,” according to the letter dated July 27. The harassment by tax officials and pressure from lenders led to a “serious liquidity crunch.”Note to AssistantSiddhartha’s last note was handed to his assistant who was told to send it to top company officials the next morning, according to a person familiar with the matter who asked not to be identified because the matter is private. When he went missing in the evening, the assistant immediately sent out the notes, the person said.Coffee Day’s board appointed S.V. Ranganath as the interim chairman and Nitin Bagmane as the interim chief operating officer, according to an exchange filing Wednesday. The board also “took serious note” of the “unverified” letter from Siddhartha and “resolved to thoroughly investigate this matter.”Coffee Day went public in 2015, nearly two decades after opening its first cafe in Bengaluru, selling shares at 328 rupees apiece. A unit of private equity firm KKR & Co. owns 6.07% of the company. Standard Chartered Private Equity holds 5.7%, while Nandan Nilekani, co-founder of Infosys Ltd., has a 2.69% stake.“We are deeply saddened by the developments and our thoughts are with his family at this time,” KKR said in an email.KKR’s fund sold 4.25% of its holding of about 10.3% in February, 2018 and haven’t sold any shares before or since, according to the email.‘Great Relationship’“We backed VG Siddhartha in early 2010 and have had a great relationship with him throughout,” Standard Chartered Private Equity said in an email. The PE firm sold about 1% on the exchange in April 2018 and hasn’t sold anything since, it said.Coffee Day’s shares closed 20% lower for a second day on Wednesday, taking this year’s loss to 56%. Shares of Sical Logistics Ltd., another company where Siddhartha’s family is a large investor, also plunged by nearly 20% on Tuesday and Wednesday.Siddhartha’s cafe network traces its roots to the IT hub of Bengaluru in 1996, and it established a foothold in India’s fledgling coffee scene more than a decade before Starbucks Corp. entered Asia’s third-largest economy.But there were signs Siddhartha and Coffee Day were struggling with debt.Pledged HoldingsHe and other founders of Coffee Day pledged about 76% of their holdings as collateral, according to filings. The debt burden prompted him to start selling assets earlier this year. In April, he sold a 20% stake in software services firm Mindtree Ltd. to engineering giant Larsen & Toubro Ltd. He was seeking a valuation of as much as $1.45 billion from Coca-Cola Co. to sell a stake in Coffee Day, the Economic Times newspaper reported last month.Debt at Coffee Day rose 29% to 65.5 billion rupees ($952 million) in the financial year ended March 31 from a year earlier. Its debt-to-Ebitda ratio jumped to 11.4 from 6.7 over the same period, according to data compiled by Bloomberg.The company “remains deeply committed to safeguarding the interests of all stakeholders, including investors, lenders, employees and customers,” Coffee Day said in the Wednesday exchange filing.Siddhartha’s death did prompt Tokyo-based Impact HD, which has a joint venture with the coffee chain to open convenience stores across India, to delay the opening of its first ‘Coffee Day essentials’ store, it said in a statement. The store was scheduled to open on Aug. 1 in Bangalore. The Japanese firm doesn’t expect any impact from his death on the two firms’ joint venture, according to the statement.“We think there is adequate top management bandwidth to continue with day-to-day operations in the near term,” Morgan Stanley analysts Nillai Shah and Archana Menon wrote in a July 30 note to clients.Siddhartha, who began his career as an investment banker, was the son-in-law of Indian politician S.M. Krishna, who also served as nation’s external affairs minister from 2009 to 2012. A media-shy entrepreneur, who rarely gave interviews, he came from India’s coffee heartland of Chikmagalur where his family has grown the bean on its estates since 1870, according to a report by The Times of India.He got inspired to start his own branded coffee chain after meeting an executive from the family that owns German coffee brand Tchibo, the Times of India report said. Tchibo started small in 1949 and went on to become one of the biggest roasters in Europe.More Than StarbucksCoffee Day has about 1,700 outlets, 10 times more than what Starbucks runs in the nation, according to the National Restaurant Association of India.Read: Starbucks’ India Rival Coffee Day Falls in Trading DebutSiddhartha had sleepless nights when Starbucks entered India, according to an article he wrote for the Outlook magazine in 2016.He had a “miserable moment” when Coffee Days stock tanked at its debut, giving him “quite an ego blow,” he wrote in the column.(Adds details of the last letter Siddhartha sent to his assistant.)\--With assistance from P R Sanjai, Ravil Shirodkar, Pradeep Kurup, Lisa Du, Anurag Kotoky, Chanyaporn Chanjaroen and Ari Altstedter.To contact the reporters on this story: Ameya Karve in Mumbai at firstname.lastname@example.org;Saritha Rai in Bangalore at email@example.comTo contact the editors responsible for this story: Arijit Ghosh at firstname.lastname@example.org, Bhuma ShrivastavaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- V. G. Siddhartha, the man who founded India’s biggest coffee chain more than a decade before Starbucks Corp. entered Asia’s third-largest economy, has died, police said.Siddhartha went missing on Monday after he went for a walk near a bridge close to the southern Indian city of Mangaluru. His body has been found, the city’s police commissioner Sandeep Patil said by phone on Wednesday. Patil didn’t elaborate.Coffee Day Enterprises Ltd., a company Siddhartha founded, on Tuesday released a letter purportedly written by him to the board about “succumbing to the situation” because of pressure from lenders, one of the private equity partners, and harassment by tax officials. Coffee Day’s external media representatives on Wednesday said they couldn’t immediately comment.The company’s shares plunged by the 20% limit in Mumbai. Siddhartha whose cafe network traces its roots to the IT hub of Bengaluru in 1996, didn’t return after telling his driver he was going for a walk on Monday.Siddhartha and other founders of Coffee Day pledged about 76% of their holdings as collateral, according to filings. The debt burden prompted him to start selling assets earlier this year. In April, he sold a 20% stake in software services firm Mindtree Ltd. to engineering giant Larsen & Toubro Ltd. He was seeking a valuation of as much as $1.45 billion from Coca-Cola Co. to sell a stake in Coffee Day, the Economic Times newspaper reported last month.“I gave it my all but today I gave up as I could not take any more pressure,” according to the letter dated July 27. The harassment by tax officials and pressure from lenders led to a “serious liquidity crunch.”The company is taking help from concerned authorities, and its leadership team will “ensure continuity of business,” Coffee Day said in an exchange filing on Tuesday.Shares of Sical Logistics Ltd., another company where Siddhartha’s family is a large investor, also plunged 20%. Sical had total debt of 11 billion rupees at the end of March, while loans at Coffee Day jumped 29% from a year earlier to 65.5 billion rupees, according to data compiled by Bloomberg.Coffee Day went public in 2015, nearly two decades after opening its first cafe in Bengaluru, selling shares at 328 rupees apiece. A unit of private equity firm KKR & Co. owns 6.07% of the company, while Nandan Nilekani, co-founder of Infosys Ltd., has a 2.69% stake.Coffee Day has about 1,700 outlets, 10 times more than Starbucks runs in the nation, according to the National Restaurant Association of India.“We are deeply saddened by the developments and our thoughts are with his family at this time,” KKR said in an email. The fund sold 4.25% of its holding of about 10.3% last February and haven’t sold any shares before or since, according to the email.Siddhartha, who began his career as an investment banker, had sleepless nights when Starbucks entered India, according to an article he wrote for the Outlook magazine in 2016.He had a “miserable moment” when Coffee Days stock tanked at its debut, giving him “quite an ego blow,” he wrote in the column.\--With assistance from P R Sanjai, Ari Altstedter, Ravil Shirodkar, Pradeep Kurup and Jeanette Rodrigues.To contact the reporters on this story: Anurag Kotoky in New Delhi at email@example.com;Ameya Karve in Mumbai at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com, Arijit Ghosh, Ravil ShirodkarFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.